Elon Musk Backs Blockchain to Help US Treasury Fight Fraud
Elon Musk, who leads President Donald Trump’s Department of Government Efficiency (D.O.G.E.), has called out the U.S. Treasury for approving fraudulent payments and suggested blockchain as a solution.
His remarks came in response to concerns about inefficiencies and mismanagement in the Scott Bessent-led department.
Could Blockchain Solve Treasury Fraud?
The controversy started when Musk took to X on February 2, stating that career officials in the U.S. Treasury were “breaking the law every hour of the day” by approving unauthorized and unlawful payments. Earlier, without offering proof, he claimed that these officers were under instructions always to approve payments, even to “known fraudulent and terrorist groups.”
His remark was quickly picked up by crypto commentator Mario Nawfal, who then asked, “Should the Treasury be put on the blockchain so this doesn’t happen?” Musk’s response was a decisive “Yes!” igniting discussions on whether distributed ledger technology could help streamline federal government practices.
Advocates argued that moving Treasury transactions on-chain would create an immutable, real-time record of every dollar spent. They suggested that this level of transparency could help eliminate backroom deals, misallocated funds, and hidden handouts.
Contributing to the conversation, Nawfal detailed how the Treasury executed transactions worth trillions daily, but its systems remain opaque and inefficient, enabling fraud and mismanagement. He claimed that on-chain transactions could ensure a fraud-proof system, effectively stopping off-the-books deals and cases of missing funds.
Podcast host Lindsay Poss highlighted Ukraine’s Transparent Network as a real-world example of blockchain in government finance. She noted that the system tracks reconstruction funds, helping combat the estimated 40% of aid lost to corruption.
Others echoed similar views, with X user Keeny mentioning that real-time tracking could revolutionize large financial systems. However, some, like Aquino, a crypto trader and analytics developer, were more cautious. They suggested that there could be challenges in implementing such a shift, including political resistance and the complexity of overhauling legacy infrastructure.
Musk Under Fire
Musk’s remarks come in the wake of reports that D.O.G.E. may have gained access to sensitive taxpayer data held by the U.S. Treasury in an attempt to “illegally withhold payments” to various government programs.
Last month, the Tesla CEO found himself on the wrong end of a lawsuit by the U.S. Securities and Exchange Commission (SEC), alleging he failed to disclose his X holdings within the required timeframe after acquiring over 5% of the social platform’s stock.
He is currently the sole head of the D.O.G.E task force following the resignation of co-lead Vivek Ramaswamy in January. The billionaire businessman previously warned that some of the measures his team would enforce could possibly slow down the growth of Bitcoin’s value.
The post Elon Musk Backs Blockchain to Help US Treasury Fight Fraud appeared first on CryptoPotato.
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Kraken Secures MiFID License to Offer Derivatives in Europe
Kraken Continues Expansion in Europe
Kraken, one of the biggest US-based digital currency exchanges, obtained a license under Markets in Financial Instruments Directive that enables selling derivatives on digital assets across the bloc. It secured the license following the purchase of a Cypriot investment firm that has only just been authorized by the Cyprus Securities and Exchange Commission.
The move further cements Kraken’s regulatory standing in Europe, as it will be able to offer sophisticated financial products to institutional and professional traders throughout EU jurisdictions. The company plans to leverage the region’s growing demand for crypto derivatives.
Strategic Expansion Across Europe
Kraken has been aggressively expanding in the European market over the last two years, securing key regulatory approvals in Spain and Ireland, launching Kraken Custody in the UK, and acquiring a Dutch crypto brokerage in 2024.
The European crypto market, valued at about $7 billion, will grow annually at a rate of 15% until 2030. It is now reported that Kraken is gearing up to become a big player in the region’s evolving crypto landscape, amid an uptick in institutional interest with increasing regulatory clarity.
MiCA Regulations and Market Competition
The European Union has been strengthening the digital asset regulatory requirements by creating a new regulatory regime for crypto markets: MiCA. This means Anti-Money Laundering regulation, regulations on the issuance of tokens, and compliance by stablecoins will provide increased investor protection and market stability.
Several major crypto firms including Crypto.com and OKX have already secured licenses under MiCA. Kraken will go on to directly compete with other exchanges that include Bitstamp, Coinbase, D2X, and Backpack because the demand for its derivatives is increasingly rising.
Crypto Derivatives: How Do They Work and What Are the Risks
Crypto derivatives are financial instruments whose value is derived from that of the underlying digital assets. The products include futures and options, among others, that advanced traders use for hedging against risk, speculation on price movements, and leveraging. Despite high potential returns, these derivatives have considerable risks because of crypto’s highly volatile prices. The platform will ensure, through regulatory oversight under MiFID, that investor protection standards and requirements regarding risk management are met.
Kraken’s Larger Business Moves
But it’s not just about the European expansion. Kraken has been in the news on US soil. It recently brought back its staking service, two years after the company pulled the plug amid a legal tussle with the US Securities and Exchange Commission. Kraken more than doubled its revenue in 2024, reaching $1.5 billion, despite the regulatory hurdles it has faced.
The new MiFID license from Kraken better positions it to double its derivatives presence in Europe and further support its global expansion.
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